Tag Archives: economy

Initiation to Offshore Banking Terms

Offshore Banking Terms

Many investors are puzzled by the various terms used by bankers in describing ways to protect their money. Here is a short list of some of the most common ones.

Asset Protection Trust (APT) is an irrevocable trust, usually created (settled) offshore for the principal purposes of preserving and protecting wealth against creditors. Title to the asset is transferred to a trustee. It is used for asset protection and usually tax neutral. Its function is to provide for the beneficiaries of the APT. A trust is a contract affecting three parties, the settlor (who sets up the offshore trust; also called the grantor in U.S. or IRS terms), the trustee and the beneficiary. A trust protector is optional but recommended, as well. Through the trust, the settlor transfers asset ownership to the trustee on behalf of the beneficiaries.

Business trust is created for the primary purpose of running a business. These trusts are treated as persons under the Internal Revenue Code (IRC). It must have a commercial purpose and actually function as a business.

CARICOM is the Caribbean Common Market. Its members consist of 14 member countries of the Caribbean community, including Antigua, Bahamas, Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent, Surinam, Trinidad and Tobago. The purpose of this organization is to encourage free trade and free movement of labor. Conspicuous by their absence are the Cayman Islands and the British Virgin Islands, the two major players in international banking and finance, which did not wish to be regulated by a small local community because of greater international ties.

Discretionary Trust is a grantor trust in which the trustee has sole discretion as to who among the listed beneficiaries receives income and/or principal disbursement. The trustee has full authority over the fund, or it would cease to be a discretionary trust. A letter of wishes, or side letter, can provide guidance to the trustee without having any legal and binding effects. The letter(s) must be carefully drafted, as the trustee cannot be seen as a pawn of the beneficiaries or there is basis for the argument that there never was a complete renouncement of the assets.

Estate is the sum of personal interests in real and/or personal property.

Flight Capital is money which flows offshore and likely never returns. It is exacerbated by a lack of confidence in government fiscal management.

GmbH is a German form of a limited liability corporation.

High Net Worth (HNW) Person is any individual with more than $1,000,000 in liquid assets.

International Business Company (IBC) is a corporation formed (incorporated) under the Company Act of a tax haven, but is not authorized conduct business within that country. It is intended to be
used only for global operations. It is owned and operated by members and/or shareholders, just like other corporations.

Limited Company is not an international business company. May be owned by a resident of the tax haven and is set up under a special corporate law with a simpler body of administrative laws. A Limited Liability Company (LLC) consists of member owners and a manager, at a minimum. It has tax advantages and operational flexibility found in a partnership, operating in a corporate-style structure, with limited liability as provided by the state’s laws. A LLP is a Limited liability partnership, a form of the LLC frequently used for professional associations, such as accountants and attorneys. A LLLP is a Limited liability limited partnership, intended to protect the general partners from liability.

Member is an equity owner of a limited liability company ((LLC), limited liability partnership (LLP), limited liability limited partnership (LLLP) or a shareholder in an IBC.

NRA is a nonresident alien of the U.S. An NRA is not a U.S. person a  defined under the Internal Revenue Code (IRC).

Offshore is an international term meaning not only out of your country, but also out of its tax jurisdiction.

PLC is a UK public limited company.

The Revenue Reconciliation Act of 1995 proposed changes to the Internal Revenue Code affecting foreign trust reporting, among other changes.

Securities are shares and debt obligations of every kind, including options, warrants, and rights to acquire shares and debt obligations.

Settle. To create or establish an offshore trust. Done by the settlor (offshore term) or the grantor (U.S. and IRS term).

Settlor. One (the entity) who (which) creates or settles an offshore
trust.

TCI are the Turks and Caicos Islands, a popular tax haven.

Trustee is the controller of a trust fund. This person is independent of the settlor or grantor and has the fiduciary responsibility to manage the assets of the fund as a reasonable prudent business person would do in the same circumstances. The trustee must defer to the trust protector when required in the best interest of the trust fund. The reporting requirements of the trustee are defined at the creation of the trust include how often, and to whom, the trustee will respond to instructions
or inquiries, investment strategies and fees for the trustee’s services. The trustee may have full discretionary powers to distribute the fund to beneficiaries.

Uniform Partnership Act (UPA) is one of the uniform laws adopted by some states or used as a baseline for other states.

Vetting is the process used by the offshore consultant for evaluating whether a prospective client is a good candidate for offshore asset protection.

World Bank was formed to be the lender and technical advisor to developing countries, utilizing funds and technical knowledge from member nations. It has often been criticized for promoting austerity programs in indebted third-world nations.

Hopefully this short guide will help investors seeking asset havens and offshore banking facilities.

Written by
Dillon Norris

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A to Z Caribbean : Antigua

A Caribbean Island called Antigua

The country of Antigua & Barbuda, with a population of 83,000, is made up of 3 main islands; Antigua is just 108 square miles in size (14 miles long by 11 wide), however it is still the largest of the English speaking Leeward Islands. Barbuda is 30 miles to the north and just 68 square miles of coral island. Redonda is essentially just a large high rock uninhabited by humans, but with sea birds and wild goats in residence.

The main island of Antigua is mostly flat with the highest peak being Boggy Peak at 1320ft. The island is surrounded by beautiful beaches and there are many offlaying coral reefs that offer fantastic snorkelling and diving. The original inhabitants, the Amerindians, named it ‘Wadadli’ which means ‘our own’. It was named ‘Antigua’ (meaning ‘ancient’) by Columbus after a church in Spain.

Tourism is the main economy of Antigua, with employment being mostly in tourism and government services. Agriculture is limited due to an insufficient supply of water on the island, with most of what is grown being consumed locally.

Antigua also have a large international airport that is used as a hub for many of the other islands of the Caribbean. VC Bird International Airport has over 1 million passengers passing through it’s terminal each year. There are also two medical schools located on the island.

The reputed 365 white sand beaches are the foremost attraction for visitors to Antigua. Many hotels and all inclusive resorts offering sports and activities or just relaxation, line the shores. The myriad restaurants are varied in foods and cuisines.

During May / June each year, Antigua Sailing Week brings many world class professional and amateur sailors to the island. English Harbour and Falmouth Harbour are the centre of yachting in Antigua for provisioning, docking and anchoring. English Harbour is also home to Nelson’s Dockyard. Built in 1725, this was a maintenance dockyard for the British Royal Naval Warships as they protected their reign over the valuable sugar islands of the Caribbean. Remnants of the dockyard are still visible, including the boat house & sail loft, which has been roofless since a hurricane in 1871.

The beauty of Antigua has attracted many notable people to purchase a residence there including:

Oprah Winfrey
Richard Branson
Eric Clapton
Giorgio Armani
Silvio Berlosconi
Larry Flynt
Timothy Dalton

Antigua has direct airline access to Europe, US and Canada. It is a lovely spot to explore and discover whether you too could own a residence on this land of 365 beaches.

To view properties on our website click here, or contact us to discover other properties that we have for sale.

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French West Indies is in Europe

The French West Indies as a Part of Europe

Martinique, Guadeloupe and half of the island of St Martin are all classified as overseas départements of France, and hence part of Europe. This is good news for holders of European passports, as these islands are simply an extension of mainland France from an immigration point of view.

Martinique has an official language of French, uses the Euro as currency, and the local population are full citizens of France with full legal and political rights including holding a French passport. This is also the same for the local populations in both Guadeloupe and St Martin.

St Maarten/St Martin is an island that is half Dutch and half French, hence the two names. The French part is a part of Europe, whereas the Dutch part, Sint Maarten, is a part of the Netherlands Kingdom, but not classified as a part of Europe; this is the same for the other parts of the Netherlands Antilles, including Curacao, Aruba, Saba and Bonaire.

EU citizens can live and work in the 3 islands belonging to the French West Indies, as if they were in any part of Europe. Taxes will need to be paid and contributions towards social care.

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Exchanging Large Sums of Currency

Exchanging Large Sums of Currency Using a Broker

When you purchase a home abroad, it’s sometimes necessary to exchange a large amount of money to another currency. What do you need to keep in mind?

When exchanging large sums of money, it would be cheaper to approach a broker for this instead of going to a bank. The rates you will receive with a broker will be better.

The broker will need to know your identity and he will need to confirm it. This is due to anti-money laundering laws. Documentation will need to be provided as evidence of identity, and proof of your address.

The broker will then start working for you to find a good exchange rate to buy your currency. When he contacts you with an exchange rate, you will need to instruct him to buy the currency on your behalf.

Once the purchase has been made, you will receive a contract note confirming how much you bought and the exchange rate. This contract note will inform you of where to send payment for the currency that has been purchased. It is also possible to transfer funds to the broker before the purchase is made, so that it is on hand for when the exchange rate is favourable.

Once the funds have been cleared, the broker will transfer the currency to the destination that you have stipulated. A payment confirmation will most likely be supplied by any principal banks that have been involved in the transfer.

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Saving Taxes with an Offshore Company

Offshore Company – A Legitimate Way to Save on Taxes

Saving on taxes is something almost everyone wants to do. However the majority of countries have tax laws that mean we must pay our taxes if we want to stay on the right side of the law. Yet there is a way to legally reduce the level of taxation you or your business are subjected to by forming an offshore company.
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The OPPLive Conference 2008

OPPLive Conference 2008

I’m packing my bags and getting ready to head for England! I’m not leaving my lovely island home forever, instead I am going to the UK to attend the OPPLive Conference in London, Nov 25-26th and give a presentation alongside CaribPro representative, Jason Kumpft. Our seminar entitled ‘Profitable Possibilities and Partners in the Caribbean’ will be held on 26th November from 11:00-12:00 in Theatre 3. The session will highlight the new opportunities that exist for both local agents and international partners in an exciting combination of real estate and offshore asset protection possibilities, including economic citizenship.
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Buying a Caribbean Property : Time to Jump

Looking to Buy a Caribbean Property : Now is a Good Time

For anyone living in the UK or Europe, who has been sitting on the sidelines waiting to buy a Caribbean property, now may be the time to jump and make that property purchase in the Caribbean. Movements over the past month have seen the pound and euro fall around 5% in value against the US$Dollar, which is used for pricing most Caribbean properties.It is difficult to predict whether this slide will continue, as the international money markets weigh the relative strengths of the US economy against the Eurozone.
However, with little growth predicted through 2008 and 2009 and the threat of recession looming; there is a very real chance that the recent slide in the value of the pound and euro could continue to erode the value of these currencies possibly back to the levels sustained for many years through the 1990’s, where the dollar stabilised at around US$1.55 to the pound.
US Dollars are used for Most Property Purchases

It may be far fetched to predict such a decline in the buying power of the pound; however very few would have predicted in the 1990’s that the dollar would have slipped to the recent levels of US$2 to the pound and it would have been even harder in the 1980’s to have predicted this fall, when the dollar reined supreme at US$1 to £1.

For the time being, those pondering a Caribbean property should take heed of the changing climate and make their property purchases over the next few months, to enjoy what are still traditionally very favourable rates of exchange against the US dollar.

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Caribbean Real Estate

The Caribbean Real Estate Market

The worlds financial markets have all over recent months seen increasing volatility, due to a serious weakness in the sub prime lending sector. This has happened because financial institutions lent heavily to people with poor credit ratings over recent years, when money was in good supply and interest rates were low. It did not require a crystal ball to see that when interest rates finally rose from their all time lows, that there would be a high level of defaults from borrowers who could not repay their mortgages.

In America, the results of this financial crisis have been building for some time, with many areas of the housing market suffering a decline in real estate values and new house starts falling dramatically. Continue reading

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